That’s an outstanding 40 per cent of the global workforce. But despite the huge anticipated growth in this emergent labour force, there continue to be questions and concerns over how to ensure the best interests of the workers.From working hours, to pay, to tax issues – the “right” approach to dealing with the unprecedented rise of this new breed of worker is proving difficult for many systems to handle. The confusion lies in the fact that these on-demand workers are an obscure mix of employee and business owner. While a portion of profits goes to the digital service provider, the “employee” is often required to make the upfront investment of eg. a car, and cover ongoing costs, such as food to be delivered, or fuel. As such, traditional infrastructures are struggling to keep up. At APS financial, we have been approached by a number of workers in this space, who have been denied basic business bank accounts by traditional providers. Why are banks refusing to acknowledge on-demand workers? After the financial crisis in 2007/2008, the banks closed financial facilities for many individuals and freelancers and sole traders were one of the groups to suffer. As loans to poor-quality borrowers were identified as a key trigger for the crash, financial institutions were forced to tighten regulations and checks to make sure that a similar situation wouldn’t occur again. The result is a set of restrictive credit and quality checking procedures, which include denying bank accounts to those with a limited trading history – a catch 22 for those setting up with an on-demand service for the first time.
Read more about on-demand businesses:
- Uber’s unhappy with TfL plans for English exams – and is asking users to help stop it
- Deliveroo guzzles $275m Series E investment – more than all three 2015 rounds combined
- Birmingham firm’s reminder service wins Uber investment and Travis Kalanick strategy
The on-demand trend shows now signs of slowing, as Deliveroo secured its largest partnership to date this year.Image source
Share this story